AirSwap is a platform for peer-to-peer trading of Ethereum tokens, which means that users trade their tokens directly with each other. The platform is decentralized because AirSwap does not control the users’ funds and trading execution is done via smart contracts.
The AirSwap platform works by having users communicate with each other what tokens they want to exchange and at what price. When both parties are ready to complete the exchange, the Swap Protocol, which is an Ethereum smart contract, then executes the trade.
The platform has the advantage of a decentralized exchange in that users are in complete control of their funds until the trade is executed so either both parties get what they traded for or neither does.
Who Invented AirSwap?
The co-founders of AirSwap are Michael Oved and Don Mosites, who are also the co-founders of Fluidity, the parent company of AirSwap.
A brief history
October 2017 – The AirSwap Token (AST) sale raises $36 million.
October 2018 – AirSwap Spaces enables groups to communicate, negotiate, and coordinate potential decentralized trades
January 2019 – The DexIndex launches as an open-source tool that searches and lists prices for different tokens on decentralized exchanges on Ethereum.
What’s so special about it?
Centralized exchanges require users to trust in the exchange to safely keep their money for them and not get hacked, break the law, or make any unwise decisions. On the other hand, decentralized exchanges in which trades happen completely on the blockchain are vulnerable to:
Slow transaction times, because Ethereum is currently very slow.
Front running in which traders can manipulate trades or prices by putting their transactions first.
Privacy concerns since decentralized exchange trading happens on public order books for all to see.
In AirSwap, trade execution happens directly from one wallet to another wallet at the same time, so there is no danger of front running. Negotiations also happen privately and not on the blockchain so privacy is preserved. Finally, because there is no maintenance or custody required, the platform has zero fees.
What else is different?
To help AirSwap users find peers to trade with, they created AirSwap Spaces. AirSwap Spaces are essentially rooms where users can post their interest in trading different tokens and other users can discover them. They can chat, negotiate, and execute trades from Spaces, which is encrypted and private.
How is AST produced?
How do you get hold of AST?
What can you do with AST?
Unlike with most exchanges, there are no fees to use AirSwap, so AST is not used to pay for trading fees, but instead functions as a way to broadcast trades on the AirSwap network. This happens by staking AST when a trader wants to create a trade that is seeking to be fulfilled.
The minimum stake for a broadcast is 250 AST per intent to trade. The stake is locked and then unlocked, not burned. The signal is broadcasted on the AirSwap index where anyone can search the index for free without having to hold AST. To fulfill an order; users search the index, select the trade they like, and execute the trade.
AirSwap continues to add features and improvements to their trading platform. Though there are many advantages to peer-to-peer trading, this method of exchange also has many challenges, such as the lack of peers ready to take a trade. To remedy this challenge, AirSwap is creating new tools for users to more easily find peers to make trades more automatic, complete, and seamless.